1. Field of the Invention
The present invention relates to a generalized method for automated account reconciliation which can be used to match transactions in one accounting dataset to transactions in another accounting dataset. It is based on advanced machine learning (or artificial intelligence) and statistical algorithms and can be applied to data in any format.
2. Description of the Prior Art
U.S. Pat. No. 7,895,094 describes a global account reconciliation tool which provides standard templates for entering transaction and account data, allowing for more ready discovery of open (i.e., unreconciled) accounting items. Once data is brought into these templates, the tool provides for either (1) auto-matching functionality relying on user-defined business rules, or (2) manual reconciliation.
This tool is limited to working with data which has been fitted into the templates it embodies, and any automation of the reconciliation process is not inherent to the tool, but relies on heuristics provided by the user. For the user, the process of installing and learning how to use the tool, and defining business rules could be time-consuming enough to outweigh the efficiencies of automated reconciliation. Furthermore, the accuracy of reconciliation results depends heavily on the suitability of the heuristics embodied in the user-provided business rules. This in turn makes the tool dependent on the expertise of the user in formulating heuristics.
U.S. Pat. No. 7,970,668 discloses a system and method for automated comprehensive reconciliation processing. This invention includes the maintenance of an automated checklist of the various reconciliation steps, enabling maintenance of an audit trail and generation of metrics.
This method does not automate the actual matching of items in one dataset to items in another, but instead is essentially a tracking system allowing an analyst to ensure that data is complete and that all necessary reconciliation steps are duly completed. The most time-consuming part of account reconciliation, for datasets of any reasonable size (upwards of thousands of records), is the process of actually matching data from one dataset to another. Therefore, for such datasets, this method is unlikely to achieve significant efficiency and time-saving in the area where it matters most.
U.S. Pat. No. 8,019,739 discloses a method and system for an on line-like account processing and management. This method processes otherwise batch files using a pseudo-on line transaction processing (OPT) technique and is geared towards increasing the availability of data.
Again, this method does not automate the actual matching of items from disparate datasets, which for reconciliation problems of any significant size is the most time-consuming and labor-intensive part of the process, even if data is available real-time. Therefore, for such datasets, this method is unlikely to achieve significant efficiency and time-saving in the area where it matters most.